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<SEC-DOCUMENT>0001204459-11-000228.txt : 20110128
<SEC-HEADER>0001204459-11-000228.hdr.sgml : 20110128
<ACCEPTANCE-DATETIME>20110128085735
ACCESSION NUMBER:		0001204459-11-000228
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20110128
ITEM INFORMATION:		Results of Operations and Financial Condition
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20110128
DATE AS OF CHANGE:		20110128

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CHINA BAK BATTERY INC
		CENTRAL INDEX KEY:			0001117171
		STANDARD INDUSTRIAL CLASSIFICATION:	MISCELLANEOUS ELECTRICAL MACHINERY, EQUIPMENT & SUPPLIES [3690]
		IRS NUMBER:				880442833
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-32898
		FILM NUMBER:		11553868

	BUSINESS ADDRESS:	
		STREET 1:		BAK INDUSTRIAL PARK, NO. 1 BAK STREET
		STREET 2:		KUICHONG TOWN, LONGGANG DISTRICT
		CITY:			SHENZHEN PEOPLE
		STATE:			F4
		ZIP:			518119
		BUSINESS PHONE:		86-755-8977-0093

	MAIL ADDRESS:	
		STREET 1:		BAK INDUSTRIAL PARK, NO. 1 BAK STREET
		STREET 2:		KUICHONG TOWN, LONGGANG DISTRICT
		CITY:			SHENZHEN PEOPLE
		STATE:			F4
		ZIP:			518119

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	MEDINA COFFEE INC
		DATE OF NAME CHANGE:	20000626
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>d8k.htm
<DESCRIPTION>FORM 8-K
<TEXT>



<HTML>
<HEAD>
   <TITLE>China BAK Battery, Inc.: Form 8-K - Filed by newsfilecorp.com</TITLE>

</HEAD>

<BODY style="font-size:10pt;">

<HR noshade align="center" width=100% size=3 color="black">
<A name=page_1></A>
<P align=center><B><FONT size=5>UNITED STATES <BR>SECURITIES AND EXCHANGE COMMISSION</FONT><BR></B><B>WASHINGTON, D.C.
20549</B><BR></P>
<P align=center><B><FONT size=5>FORM 8-K <BR></FONT></B><BR><B>CURRENT
REPORT</B></P>
<P align=center><B>PURSUANT TO SECTION 13 OR 15(d) OF <BR>THE SECURITIES AND
EXCHANGE ACT OF 1934 </B></P>
<P align=center><B>Date of Report (Date of Earliest Event Reported): January 28,
2011 </B></P>
<P align=center><FONT size=6><STRONG>CHINA BAK BATTERY,
INC.<BR></STRONG></FONT><FONT size=2><EM>(Exact name of registrant as specified
in its charter) </EM></FONT></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD noWrap align=center><B>Nevada </B></TD>
    <TD noWrap align=center width="33%"><B>001-32898 </B></TD>
    <TD noWrap align=center width="33%"><B>86-0442833 </B></TD></TR>
  <TR vAlign=top>
    <TD noWrap align=center><I>(State or other jurisdiction </I></TD>
    <TD noWrap align=center width="33%"><I>(Commission File No.) </I></TD>
    <TD noWrap align=center width="33%"><I>(IRS Employer </I></TD></TR>
  <TR vAlign=top>
    <TD noWrap align=center><I>of incorporation) </I></TD>
    <TD noWrap align=left width="33%">&nbsp; </TD>
    <TD noWrap align=center width="33%"><I>Identification No.)
  </I></TD></TR></TABLE>
<P align=center><B>BAK Industrial Park, No. 1 BAK Street <BR></B><B>Kuichong
Town, Longgang District <BR></B><B>Shenzhen, 518119 <BR></B><B>People&#146;s Republic
of China </B><BR><I>(Address, including zip code, of principal executive
offices)</I></P>
<P align=center><B>(86-755) 8977-0093 </B><BR><I>(Registrant&#146;s telephone number,
including area code)</I><BR></P>
<P align=center><B>Not applicable </B><BR><I>(Former name or former address, if
changed since last report)</I></P>
<P align=left>Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of
the following provisions (see General Instruction A.2. below): </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">[&nbsp;&nbsp; ] </TD>
    <TD>
      <P align=justify>Written communications pursuant to Rule 425 under the
      Securities Act (17 CFR 230.425)</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%">[&nbsp;&nbsp; ] </TD>
    <TD>
      <P align=justify>Soliciting material pursuant to Rule 14a-12 under the
      Exchange Act (17 CFR 240.14a-12)</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%">[&nbsp;&nbsp; ] </TD>
    <TD>
      <P align=justify>Pre-commencement communications pursuant to Rule 14d-2(b)
      under the Exchange Act (17 CFR 240.14d-2(b))</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%">[&nbsp;&nbsp; ] </TD>
    <TD>
      <P align=justify>Pre-commencement communications pursuant to Rule 13e-4(c)
      under the Exchange Act (17 CFR 240.13e-4(c))</P></TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<P align=justify><B>Item
2.02&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Results of
Operations and Financial Condition. </B></P>
<P style="text-indent:5%" align=justify>On January 28, 2011, China BAK Battery,
Inc. (the &#147;Company&#148;) issued a press release announcing its financial results for
the fiscal quarter ended December 31, 2010. A copy of the press release is
furnished as Exhibit 99.1 hereto. </P>
<P style="text-indent:5%" align=justify>The press release furnished as Exhibit
99.1 hereto contains certain statements that may include &#147;forward-looking
statements&#148; within the meaning of Section 27A of the Securities Act of 1933, as
amended (the &#147;Securities Act&#148;), and Section 21E of the Securities Exchange Act
of 1934, as amended (the &#147;Exchange Act&#148;). All statements, other than statements
of historical fact, are &#147;forward-looking statements,&#148; including statements
regarding the Company&#146;s business strategy, plans and objective and statements of
non-historical information. These forward-looking statements are often
identified by the use of forward-looking terminology such as &#147;should,&#148;
&#147;believes,&#148; &#147;expects,&#148; &#147;anticipates&#148; or similar expressions, and involve known
and unknown risks and uncertainties. Although the Company believes that the
expectations reflected in these forward-looking statements are reasonable, they
involve assumptions, risks and uncertainties, and these expectations may prove
to be incorrect. You should not place undue reliance on these forward-looking
statements, which speak only as of their respective dates. The Company&#146;s actual
results could differ materially from those anticipated in these forward-looking
statements as a result of a variety of factors, including those discussed in the
Company&#146;s periodic reports that are filed with and available from the Securities
and Exchange Commission. All forward-looking statements attributable to the
Company or persons acting on its behalf are expressly qualified in their
entirety by these factors. Other than as required under the securities laws, the
Company does not assume a duty to update these forward-looking statements.</P>
<P style="text-indent:5%" align=justify>In accordance with General Instruction
B.2 of Form 8-K, the information in this Report, including Exhibit 99.1 hereto,
shall not be deemed to be &#147;filed&#148; for purposes of Section 18 of the Exchange
Act, or otherwise subject to the liabilities of that section, and shall not be
incorporated by reference into any registration statement or other document
filed under the Securities Act or the Exchange Act, except as shall be expressly
set forth by specific reference in such filing.</P>
<P style="text-indent:5%" align=justify>The press release furnished as Exhibit
99.1 hereto also contains non-GAAP financial measures. For purposes of
Regulation G, a non-GAAP financial measure is a numerical measure of a
registrant&#146;s historical or future financial performance, financial position or
cash flows that excludes amounts, or is subject to adjustments that have the
effect of excluding amounts, that are included in the most directly comparable
measure calculated and presented in accordance with GAAP in the statement of
income, balance sheet or statement of cash flows (or equivalent statements) of
the issuer; or includes amounts, or is subject to adjustments that have the
effect of including amounts, that are excluded from the most directly comparable
measure so calculated and presented. In this regard, GAAP refers to generally
accepted accounting principles in the United States. Pursuant to the
requirements of Regulation G, the Company has provided reconciliations within
the press release of the non-GAAP financial measures to the most directly
comparable GAAP financial measures. </P>
<P align=center>2</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_3></A>
<P align=justify><B>Item
9.01&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Financial
Statements and Exhibits.</B></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD noWrap align=left ><B>(d) Exhibits</B> </TD>
    <TD noWrap align=left width="2%"  >&nbsp;</TD>
    <TD noWrap align=left width="92%">&nbsp; </TD></TR>
  <TR>
    <TD noWrap align=left  >&nbsp;</TD>
    <TD noWrap align=left width="2%"  >&nbsp;</TD>
    <TD noWrap align=left width="92%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left
      >Exhibit </TD>
    <TD noWrap align=left width="2%"  >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left
      width="92%">Description </TD></TR>
  <TR>
    <TD noWrap align=left  >&nbsp;</TD>
    <TD noWrap align=left width="2%"  >&nbsp;</TD>
    <TD noWrap align=left width="92%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left bgColor=#e6efff ><a href="exhibit99-1.htm">99.1 </a> </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff
      >&nbsp;</TD>
    <TD noWrap align=left width="92%" bgColor=#e6efff><a href="exhibit99-1.htm">Press Release dated
      January 28, 2011 </a> </TD></TR></TABLE>
<P align=center>3</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
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<!--$$/page=--><A name=page_4></A>
<P align=center><B>SIGNATURE</B><BR></P>
<P align=justify>Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD noWrap align=left >&nbsp; </TD>
    <TD noWrap align=left width="50%" colSpan=2><B>CHINA BAK BATTERY, INC.</B>
    </TD></TR>
  <TR>
    <TD noWrap align=left >&nbsp;</TD>
    <TD noWrap align=left width="50%"  colSpan=2>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left >Date: January 28, 2011 </TD>
    <TD noWrap align=left width="2%" >By: </TD>
    <TD noWrap align=left width="48%"><U>/s/ Marcus Cui</U> </TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left >&nbsp; </TD>
    <TD noWrap align=left width="2%" >&nbsp; </TD>
    <TD noWrap align=left width="48%">Marcus Cui </TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left >&nbsp; </TD>
    <TD noWrap align=left width="2%" >&nbsp; </TD>
    <TD noWrap align=left width="48%">Interim Chief Financial Officer
  </TD></TR></TABLE>
<P align=center>4</P>
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<!--$$/page=-->
<p align="center"><B>EXHIBITS</B><BR>
</p>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left
      >Exhibit </TD>
    <TD noWrap align=left width="2%"  >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left
      width="92%">Description </TD></TR>
  <TR>
    <TD noWrap align=left  >&nbsp;</TD>
    <TD noWrap align=left width="2%"  >&nbsp;</TD>
    <TD noWrap align=left width="92%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left bgColor=#e6efff ><a href="exhibit99-1.htm">99.1 </a> </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff
      >&nbsp;</TD>
    <TD noWrap align=left width="92%" bgColor=#e6efff><a href="exhibit99-1.htm">Press Release dated
      January 28, 2011 </a> </TD></TR></TABLE>
<P align="center">
5</P>

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<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>exhibit99-1.htm
<DESCRIPTION>EXHIBIT 99.1
<TEXT>



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   <TITLE>China BAK Battery Inc.: Exhibit 99.1 - Filed by newsfilecorp.com</TITLE>

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<p align="right"><b>
<A name="page_1"></A>

Exhibit 99.1</b></p>
<p align="center">

<IMG src="exhibit99-1x1x1.jpg" border=0 width="696" height="116">
<BR>
</p>
<P align="center">
<B><font size="5">China BAK Reports First Quarter Fiscal Year 2011 Financial Results</font></B></P>
<P align="justify">
<B>Shenzhen, China &#150; January 28, 2011 </B>&#150; China BAK Battery, Inc. (&#147;China BAK&#148;, the &#147;Company&#148;, or &#147;we&#148;) (Nasdaq: CBAK), a leading global manufacturer of lithium-based battery cells, today announced its
financial results for the first quarter of fiscal year 2011 ended December 31, 2010 (&#147;Q1 2011&#148;).   </P>
<P align="justify">
<B>Recent Achievements and Highlights</B><BR>
</P>
<UL style="text-align:justify;">
<LI>
<p style="margin-top: 0; margin-bottom: 12">Revenue increased 26.5% year-over-year and 14.3% quarter on quarter (Q1 2011 compared to Q4 2010)</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Revenues from high-power batteries more than tripled sequentially in Q1 2011 due to robust demand for batteries used in Energy Storage Solutions</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Gross margin improved to 15.7% in the first quarter of fiscal 2011 from 9.5% in the previous quarter</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Reported another quarter of positive cash flow of &#36;18.4 million from operating activities, reflecting continued progress in the Company&#146;s turnaround plan</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">Days Sales Outstanding declined to 126 days from 134 days last quarter and Days Sales of Inventory declined to 110 days from 115 days in the previous quarter</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">In November 2010, Chery Automobile Co., Ltd. officially launched its first Lithium-ion solution EV, Ruilin M1, powered by China BAK&#146;s lithium-ion phosphate batteries at the 25th World Electric Vehicle Symposium and Exposition</LI>
<LI>
<p style="margin-top: 0; margin-bottom: 12">BAK International (Tianjin) Limited (&#147;BAK Tianjin&#148;), the Company&#146;s wholly-owned subsidiary, received a subsidy of approximately &#36;7.5 million for its automated high power lithium battery project in December 2010</LI>
</UL>
<P align="justify">
During the quarter ended December 31, 2010, the Company recorded &#36;3.6 million in non-cash expense items following a strategic review of its operations. The Company has presented non-GAAP gross profit, operating income (loss), net income (loss)
and diluted loss per share excluding the impact of non-cash items on its financial results for the three months ended December 31, 2010, September 30, 2010, and December 31, 2009. A reconciliation of these non-GAAP measures to the corresponding GAAP
measure is provided in Table 4 below. The Company uses the non-GAAP information in its internal performance measures to analyze performance between periods, develop internal projections and measure management performance. The Company believes the
non-GAAP results provide investors with a measurement of operating results which are comparable with subsequent periods. </P>
<P align="justify">
<br>
&nbsp;</P>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="50%"><font size="2">China BAK Battery Inc.</font></td>
    <td width="50%">
    <p align="right"><font size="2">Page 1 of 8</font></td>
  </tr>
</table>

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<P align="justify">
<B>First Quarter Fiscal Year 2011 Financial Results</B><BR>
</P>
<P align="justify">
Net revenues for the first quarter were &#36;63.5 million, up 14.3% from &#36;55.6 million last quarter and up 26.5% from &#36;50.2 million for the same period in fiscal 2010.  </P>
<P align="justify">
Revenues from prismatic products, including aluminum-case cells and battery packs, which are used in mobile phones and certain personal electronic devices, were &#36;47.5 million, up 10.2% from &#36;43.1 million last quarter and up 22.5% from
&#36;38.8 million for the same period in fiscal 2010.  </P>
<P align="justify">
Revenues from cylindrical cells used in notebook computers were &#36;10.5 million, up 17.6% from &#36;8.9 million last quarter and up 29.1% from &#36;8.1 million for the same period in fiscal 2010.  </P>
<P align="justify">
Revenues from lithium polymer cells, used in personal electronic devices such as PDAs, MP3 players and Bluetooth devices, were &#36;3.5 million, up 17.2% from last quarter and up 9.4% from the same period in fiscal 2010. </P>
<P align="justify">
Revenues from high-power lithium battery cells, used in electric bicycles, power tools, uninterruptible power supplies, and other applications manufactured at the Company&#146;s Tianjin facility, were &#36;2.1 million, up around two times the
revenue from last quarter and up nearly 12 times the revenue from the same period in fiscal 2010. </P>
<P align="justify">
Gross profit for the first quarter of fiscal year 2011 was &#36;10.0 million, up 88.3% from &#36;5.3 million last quarter and up 4.6% from &#36;9.6 million in the same quarter of last year. Gross margin was 15.7% significantly up from 9.5% last
quarter and slightly lower than 19.0% in the year ago period. The increase in gross profit was a result of increased direct sales of battery packs to OEM cell phone manufacturers driven by strong customer demand. The year-over-year decline in gross
margin was a result of the Company&#146;s adoption of a competitive pricing strategy for its cylindrical cells to increase its market share in the OEM market. </P>
<P align="justify">
Operating expenses totaled &#36;11.8 million, or 18.6% of revenue, in the first quarter down 6.7% from &#36;12.6 million, or 22.6% of revenue, in the last quarter and down 5.1% from &#36;12.4 million, or 24.8% of revenue, in the first quarter of
fiscal 2010. Research and development expenses were &#36;1.6 million, or 2.6% of revenue, down 12.3% from &#36;1.9 million, or 3.4% of revenue in the last quarter and down 7.0% from &#36;1.8 million, or 3.5% of revenue in the same quarter of fiscal
2010. Sales and marketing expenses were &#36;2.3 million, or 3.6% of revenue down 10.4% from &#36;2.5 million, or 4.6% of revenue in the last quarter and up 12.1% from &#36;2.0 million, or 4.0% of revenue in the same quarter of fiscal 2010. General
and administrative expenses were &#36;7.9 million, or 12.4% of revenue up 26.0% from &#36;6.2 million, or 11.2% of revenue in the last quarter and down 8.8% from &#36;8.6 million or 17.2% of revenue in the same quarter of fiscal 2010.  </P>
<P align="justify">
Operating loss for the first quarter was &#36;1.8 million compared to operating loss of &#36;7.3 million in the last quarter and operating loss of &#36;2.9 million in the same quarter of fiscal 2010. Excluding the impact of non-cash items, including
provisions for doubtful debts, obsolete inventories and impairment charges related to strategic review of business operations, non-GAAP operating income was &#36;1.8 million in the first quarter of fiscal 2011 compared to non-GAAP operating loss of
&#36;3.3 million in the last quarter and non-GAAP operating income of &#36;2.7 million in the same period a year ago. </P>
<P align="justify">
<br>
&nbsp;</P>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="50%"><font size="2">China BAK Battery Inc.</font></td>
    <td width="50%">
    <p align="right"><font size="2">Page 2 of 8</font></td>
  </tr>
</table>

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<P align="justify">
Net loss was &#36;3.7 million, or diluted loss per share of &#36;0.06, in the first quarter of fiscal 2011 compared to net loss of &#36;8.6 million, or diluted loss per share of &#36;0.14, in the last quarter and net loss of &#36;3.4 million, or
diluted loss per share of &#36;0.06, in the same quarter of fiscal 2010. Excluding the impact of non-cash items, including provisions for doubtful debts, obsolete inventories and impairment charges related to strategic review of business operations,
non-GAAP net loss for the first quarter of fiscal 2011 was &#36;0.1 million, or a loss of &#36;0.00 per diluted share, compared to non-GAAP net loss of &#36;4.6 million in the previous quarter, or a loss of &#36;0.08 per diluted share, and non-GAAP
net income of &#36;2.2 million, or earnings of &#36;0.04 per diluted share in the same period a year ago. </P>
<P align="justify">
<B>Financial Condition</B><BR>
</P>
<P align="justify">
On December 31, 2010 China BAK had &#36;24.5 million in cash and cash equivalents. For the first quarter of fiscal year 2011, Days Sales Outstanding (DSO) decreased to 126 days from 134 days last quarter and Days Sales of Inventory decreased to 110
days from 115 days last quarter. Short-term bank loans and long-term bank loans totaled &#36;177.6 million as compared to &#36;179.3 million on September 30, 2010. Shareholders&#146; equity totaled &#36;149.4 million. China BAK had &#36;66.9 million
available for borrowing under its credit facilities. The Company generated &#36;18.4 million from cash flow from operating activities in the first quarter of fiscal 2011. </P>
<P align="justify">
<B>Business Outlook</B><BR>
</P>
<P align="justify">
In fiscal 2011, China BAK expects to further penetrate into the rapidly growing EV market, strengthening its existing market position. The Company also intends to be certified by additional OEM customers in the prismatic battery packs segment. </P>
<P align="justify">
&#147;As a result of our cost-control measures and profitability focus, we continue to experience recovery in gross margin level and increased cash flow generation, reflecting continued progress of our turnaround strategy,&#148; commented Ke Marcus
Cui, Interim CFO of China BAK. </P>
<P align="justify">
&#147;Our aggressive sales and marketing efforts in promoting our high-power lithium batteries used in EVs, E-bikes and UPS - energy storage solution, we continue to experience significant revenue growth from this segment. We believe, in the year
ahead, due to the outstanding growth opportunities in the EV industry, BAK Tianjin will become a significant revenue contributor to the Company,&#148; commented Mr. Xiangqian Li, CEO of China BAK.  </P>
<P align="justify">
<B>Conference Call </B></P>
<P align="justify">
China BAK will host a conference call at 8:00 a.m. ET on Friday, January 28, 2011 to discuss results for the first quarter of fiscal year 2011 ended December 31, 2010. Joining Xiangqian Li, China BAK's President and Chief Executive Officer on the
call will be Ke Marcus Cui, Interim Chief Financial Officer. To participate in
the conference call, please dial the following number approximately fifteen
minutes prior to the scheduled conference call time: 877-847-0047 or
212-444-0113. International callers should dial 852-3006-8101. The pass code for
the call is 641-962. If you are unable to participate in the call at this time,
a replay will be available from 11:00 a.m. ET on Friday, January 28, 2011
through 11:00 a.m. ET, Friday, February 11, 2011. To access the replay, please
dial 866-572-7808. International callers should dial (852) 3012-8000. The pass
code for the replay is 641-962. The conference call will be
broadcast live over the Internet and can be accessed by all interested parties on the China BAK website at http://www.bak.com.cn/. To listen to the live webcast, please go to China BAK&#146;s website at least fifteen minutes prior to the start of
the call to register, download and install any necessary audio software. For those unable to participate during the live broadcast, after the call a replay will be available on China BAK&#146;s website for a period of one year. </P>
<P align="justify">
<br>
&nbsp;</P>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="50%"><font size="2">China BAK Battery Inc.</font></td>
    <td width="50%">
    <p align="right"><font size="2">Page 3 of 8</font></td>
  </tr>
</table>

<HR noshade align="center" width="100%" size=5 color="black" style="page-break-after:always;">



<!--$$/page=-->
<A name="page_4"></A>

<P align="justify">
<B>About China BAK Battery Inc.</B><BR>
</P>
<P align="justify">
China BAK Battery, Inc. (NASDAQ: CBAK) is a leading global manufacturer of lithium-based battery cells. The Company produces battery cells that are the principal component of rechargeable batteries commonly used in cellular phones, notebook
computers and portable consumer electronics such as digital media devices, portable media players, portable audio players, portable gaming devices, and PDAs. China BAK Battery, Inc.&#146;s production facilities, located in Shenzhen and Tianjin, PRC,
cover over three million square feet and have been recently expanded to support the production of larger batteries for various types of vehicles. For more information regarding China BAK Battery, Inc., please visit</P>
<P align="justify">
http://www.bak.com.cn.<BR>
</P>
<P align="justify">
<B>Safe Harbor Statement </B></P>
<P align="justify">
This press release contains forward-looking statements, which are subject to change. The forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All &#147;forward-looking
statements&#148; relating to the business of China BAK Battery, Inc. and its subsidiary companies, which can be identified by the use of forward-looking terminology such as &#147;believes,&#148; &#147;expects&#148; or similar expressions, involve
known and unknown risks and uncertainties which could cause actual results to differ. These factors include but are not limited to: risks related to China BAK&#146;s business and risks related to operating in China. Please refer to China BAK&#146;s
Annual Report on Form 10-K for the fiscal year ended September 30, 2010, for specific details on risk factors. Given these risks and uncertainties, you are cautioned not to place undue reliance on forward-looking statements. China BAK&#146;s actual
results could differ materially from those contained in the forward-looking statements. China BAK undertakes no obligation to revise or update its forward-looking statements in order to reflect events or circumstances that may arise after the date
of this release. </P>
<P align="justify">
<B>For more information, please contact:<br>
</B><BR>
Tracy Li <BR>
China BAK Battery, Inc. <BR>
Investor Relations Officer  <BR>
Tel: +86 (755) 8977-0093 <BR>
E-mail: <U>ir@bak.com.cn</U>
</P>
<P align="justify">
Roger Ellis  <BR>
CCG Investor Relations  <BR>
Partner &amp; SVP for Market Intelligence  <BR>
Tel: 310-954-1332  <BR>
E-mail: roger.ellis@ccgir.com
</P>
<P align="justify">
<br>
<BR>
</P>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="50%"><font size="2">China BAK Battery Inc.</font></td>
    <td width="50%">
    <p align="right"><font size="2">Page 4 of 8</font></td>
  </tr>
</table>

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<!--$$/page=--><A name=page_5></A>
<P align=justify><B><I>-Financial Tables Follow-</I></B><BR></P>
<P align=center><B>Table 1</B><BR></P>
<P align=center><B>China BAK Battery, Inc. and Subsidiaries <br>
Condensed Interim Consolidated Statements of Operations and
Comprehensive Loss <br>
For the Three Months Ended December 31, 2010, September 30,
2010 and December 31, 2009 <br>
(Amounts in thousands, except per share data) </B></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD noWrap align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center
      width="10%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center
      width="10%"><B>Three Months Ended</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center
      width="10%">&nbsp; </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center
      width="10%"><B>December 31, 2010</B> </TD>
    <TD noWrap align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center
      width="10%"><B>September 30, 2010</B> </TD>
    <TD noWrap align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center
      width="10%"><B>December 31, 2009</B> </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left>&nbsp; </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="10%">(Unaudited) </TD>
    <TD noWrap align=center width="2%" >&nbsp;</TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="10%">(Unaudited) </TD>
    <TD noWrap align=center width="2%" >&nbsp;</TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="10%">(Unaudited) </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left bgColor=#e6efff>Net
      Revenues </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff>&nbsp;63,530 </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff>&nbsp;55,594 </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff>&nbsp;50,228 </TD>
    <TD noWrap align=left width="2%"
bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left>Cost of revenues </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="10%">(53,534</TD>
    <TD noWrap align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="10%">(50,286</TD>
    <TD noWrap align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="10%">(40,668</TD>
    <TD noWrap align=left width="2%" >) </TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left bgColor=#e6efff>Gross
      profit </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right width="10%"
    bgColor=#e6efff>9,996 </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right width="10%"
    bgColor=#e6efff>5,308 </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right width="10%"
    bgColor=#e6efff>9,560 </TD>
    <TD noWrap align=left width="2%"
bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left>Operating expenses: </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="10%">&nbsp; </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="10%">&nbsp; </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="10%">&nbsp; </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Research and development expenses </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff>(1,645</TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff>(1,875</TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff>(1,768</TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp;  &nbsp;Sales and marketing expenses </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="10%">(2,273</TD>
    <TD noWrap align=left width="2%" >) </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="10%">(2,536</TD>
    <TD noWrap align=left width="2%" >) </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="10%">(2,028</TD>
    <TD noWrap align=left width="2%" >) </TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;General and administrative expenses </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff>(7,878</TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff>(6,253</TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff>(8,637</TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Impairment charge </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="10%">- </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="10%">(1,981</TD>
    <TD noWrap align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="10%">- </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left
      bgColor=#e6efff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Total operating expenses </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right width="10%"
    bgColor=#e6efff>(11,796</TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right width="10%"
    bgColor=#e6efff>(12,645</TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right width="10%"
    bgColor=#e6efff>(12,433</TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left>Operating loss </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="10%">(1,800</TD>
    <TD noWrap align=left width="2%" >) </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="10%">(7,337</TD>
    <TD noWrap align=left width="2%" >) </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="10%">(2,873</TD>
    <TD noWrap align=left width="2%" >) </TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left bgColor=#e6efff>&nbsp;Finance
      costs, net </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff>(2,840</TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff>(2,640</TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff>(2,153</TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>)
  </TD></TR>
  <tr>
    <TD noWrap align=left bgColor=#e6efff>Government grant income </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff>607 </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff>221 </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff>355 </TD>
    <TD noWrap align=left width="2%"
bgColor=#e6efff>&nbsp;</TD>
  </tr>
  <tr>
    <TD noWrap align=left>Other income / (expense) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="10%">241 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="10%">(46</TD>
    <TD noWrap align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="10%">7 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
  </tr>
  <tr>
    <TD noWrap align=left bgColor=#e6efff>Loss before income taxes </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff>(3,792</TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff>(9,802</TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff>(4,664</TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>) </TD>
  </tr>
  <tr>
    <TD noWrap align=left>Income tax benefit </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="10%">134 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="10%">1,224 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="10%">1,272 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
  </tr>
  <tr>
    <TD noWrap align=left bgColor=#e6efff>Net loss </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" noWrap align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" noWrap align=right width="10%"
    bgColor=#e6efff>&nbsp;(3,658</TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" noWrap align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" noWrap align=right width="10%"
    bgColor=#e6efff>&nbsp;(8,578</TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" noWrap align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" noWrap align=right width="10%"
    bgColor=#e6efff>&nbsp;(3,392</TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>) </TD>
  </tr>
  <tr>
    <TD noWrap align=left>Other comprehensive income / (loss) </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="10%">&nbsp; </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="10%">&nbsp; </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="10%">&nbsp; </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
  </tr>
  <tr>
    <TD noWrap align=left bgColor=#e6efff>&nbsp;- Foreign currency translation
      adjustment </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right width="10%"
    bgColor=#e6efff>2,050 </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right width="10%"
    bgColor=#e6efff>2,193 </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right width="10%"
    bgColor=#e6efff>(108</TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>) </TD>
  </tr>
  <tr>
    <TD noWrap align=left>Comprehensive loss </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" noWrap align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" noWrap align=right
      width="10%">&nbsp;(1,608</TD>
    <TD noWrap align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" noWrap align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" noWrap align=right
      width="10%">&nbsp;(6,385</TD>
    <TD noWrap align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" noWrap align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" noWrap align=right
      width="10%">&nbsp;(3,500</TD>
    <TD noWrap align=left width="2%" >) </TD>
  </tr>
  <tr>
    <TD noWrap align=left bgColor=#e6efff>Net loss per share: </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD noWrap align=left width="2%"
bgColor=#e6efff>&nbsp;</TD>
  </tr>
  <tr>
    <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Basic </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" noWrap align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" noWrap align=right
      width="10%">&nbsp;(0.06</TD>
    <TD noWrap align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" noWrap align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" noWrap align=right
      width="10%">&nbsp;(0.14</TD>
    <TD noWrap align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" noWrap align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" noWrap align=right
      width="10%">&nbsp;(0.06</TD>
    <TD noWrap align=left width="2%" >) </TD>
  </tr>
  <tr>
    <TD noWrap align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp;Diluted </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" noWrap align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" noWrap align=right width="10%"
    bgColor=#e6efff>&nbsp;(0.06</TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" noWrap align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" noWrap align=right width="10%"
    bgColor=#e6efff>&nbsp;(0.14</TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" noWrap align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" noWrap align=right width="10%"
    bgColor=#e6efff>&nbsp;(0.06</TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>) </TD>
  </tr>
  <tr>
    <TD noWrap align=left>Weighted average shares outstanding: </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="10%">&nbsp; </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="10%">&nbsp; </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="10%">&nbsp; </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
  </tr>
  <tr>
    <TD noWrap align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp;Basic </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" noWrap align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" noWrap align=right width="10%"
    bgColor=#e6efff>62,895 </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" noWrap align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" noWrap align=right width="10%"
    bgColor=#e6efff>62,890 </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" noWrap align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" noWrap align=right width="10%"
    bgColor=#e6efff>61,108 </TD>
    <TD noWrap align=left width="2%"
bgColor=#e6efff>&nbsp;</TD>
  </tr>
  <tr>
    <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Diluted </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" noWrap align=right
      width="10%">62,895 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" noWrap align=right
      width="10%">62,890 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" noWrap align=right
      width="10%">61,108 </TD>
    <TD noWrap align=left width="2%"
>&nbsp;</TD>
  </tr>
</TABLE>
<p><br>
&nbsp;</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="50%"><font size="2">China BAK Battery Inc.</font></td>
    <td width="50%">
    <p align="right"><font size="2">Page 5 of 8</font></td>
  </tr>
</table>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD noWrap align=center colSpan=7>&nbsp;</TD></TR>

  <TR vAlign=top>
    <TD noWrap align=center colSpan=7><B>Table 2</B> <br>
    <BR><B>China
      BAK Battery, Inc. and Subsidiaries</B> <BR><B>Condensed Interim
      Consolidated Balance Sheets</B> <BR><B>As of December 31, 2010 and
      September 30, 2010</B> <BR><STRONG>(Amounts in thousands)</STRONG> </TD></TR>
  <tr>
    <TD noWrap align=center colSpan=3></TD>
    <TD noWrap align=center width="2%" >&nbsp;</TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="12%">&nbsp; </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
  </tr>
  <tr>
    <TD noWrap align=center>&nbsp; </TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="12%"><B>December 31,</B> </TD>
    <TD noWrap align=center width="2%" >&nbsp;</TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="12%"><B>September 30,</B> </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
  </tr>
  <tr>
    <TD noWrap align=center>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center
      width="12%"><B>2010</B> </TD>
    <TD noWrap align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center
      width="12%"><B>2010</B> </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
  </tr>
  <TR vAlign=top>
    <TD noWrap align=center>&nbsp; </TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="12%"><B>(Unaudited)</B> </TD>
    <TD noWrap align=center width="2%" >&nbsp;</TD>
    <TD noWrap align=center width="1%" >&nbsp;</TD>
    <TD noWrap align=center width="12%"><B>(Audited)</B> </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left bgColor=#e6efff>&nbsp;<B>Assets</B> </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD noWrap align=left width="2%"
bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap>&nbsp;&nbsp;&nbsp; &nbsp;<I>Current assets</I> </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="12%">&nbsp; </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="12%">&nbsp; </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap bgColor=#e6efff>&nbsp;&nbsp;&nbsp; &nbsp;Cash
      and cash equivalents </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD noWrap align=right width="12%" bgColor=#e6efff>&nbsp;24,527 </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD noWrap align=right width="12%" bgColor=#e6efff>&nbsp;22,589 </TD>
    <TD noWrap align=left width="2%"
bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap>&nbsp;&nbsp;&nbsp;&nbsp; Pledged deposits
</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="12%">16,365 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="12%">9,426 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap bgColor=#e6efff>&nbsp; &nbsp; &nbsp;Trade
      accounts receivable, net </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="12%" bgColor=#e6efff>92,219 </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="12%" bgColor=#e6efff>86,198 </TD>
    <TD noWrap align=left width="2%"
bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap>&nbsp;&nbsp;&nbsp; &nbsp;Inventories </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="12%">67,167 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="12%">64,048 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap bgColor=#e6efff>&nbsp;&nbsp;&nbsp; &nbsp;Prepayments and other receivables </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="12%" bgColor=#e6efff>5,055 </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="12%" bgColor=#e6efff>5,513 </TD>
    <TD noWrap align=left width="2%"
bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap>&nbsp;&nbsp;&nbsp; &nbsp;Deferred tax assets
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="12%">7,209 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="12%">6,888 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap bgColor=#e6efff>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total current
      assets </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="12%" bgColor=#e6efff>212,542 </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="12%" bgColor=#e6efff>194,662 </TD>
    <TD noWrap align=left width="2%"
bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap>&nbsp;&nbsp;&nbsp; &nbsp;Property, plant and
      equipment, net </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="12%">229,074 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="12%">228,885 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap bgColor=#e6efff>&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;Lease
      prepayments, net </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="12%" bgColor=#e6efff>32,178 </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="12%" bgColor=#e6efff>31,924 </TD>
    <TD noWrap align=left width="2%"
bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left>&nbsp;&nbsp;&nbsp; &nbsp;Intangible assets,
      net </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="12%">235 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="12%">184 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left bgColor=#e6efff>&nbsp;&nbsp;&nbsp; &nbsp;Deferred tax assets </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right width="12%"
    bgColor=#e6efff>1,706 </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right width="12%"
    bgColor=#e6efff>1,681 </TD>
    <TD noWrap align=left width="2%"
bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left>&nbsp;Total assets </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" noWrap align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" noWrap align=right
      width="12%">&nbsp;475,735 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" noWrap align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" noWrap align=right
      width="12%">&nbsp;457,336 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left bgColor=#e6efff><B>Liabilities</B> </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD noWrap align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD></TR>
  <tr>
    <TD noWrap align=left><I>Current liabilities</I> </TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="12%">&nbsp; </TD>
    <TD noWrap align=left width="2%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="12%">&nbsp; </TD>
    <TD noWrap align=left width="2%">&nbsp;</TD>
  </tr>
  <tr>
    <TD noWrap align=left bgcolor="#E6EFFF">&nbsp; &nbsp; &nbsp;Short-term bank loans </TD>
    <TD noWrap align=left width="1%" bgcolor="#E6EFFF" >$</TD>
    <TD noWrap align=right width="12%" bgcolor="#E6EFFF">&nbsp;139,774 </TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD noWrap align=left width="1%" bgcolor="#E6EFFF" >$</TD>
    <TD noWrap align=right width="12%" bgcolor="#E6EFFF">&nbsp;137,418 </TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" >&nbsp;</TD>
  </tr>
  <tr>
    <TD noWrap align=left>&nbsp; &nbsp; &nbsp;Current
      maturities of long-term bank loans </TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="12%">15,146 </TD>
    <TD noWrap align=left width="2%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="12%">11,956 </TD>
    <TD noWrap align=left width="2%">&nbsp;</TD>
  </tr>
  <tr>
    <TD noWrap align=left bgcolor="#E6EFFF">&nbsp; &nbsp; &nbsp;Accounts and bills payable </TD>
    <TD noWrap align=left width="1%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD noWrap align=right width="12%" bgcolor="#E6EFFF">110,591 </TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD noWrap align=left width="1%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD noWrap align=right width="12%" bgcolor="#E6EFFF">93,725 </TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" >&nbsp;</TD>
  </tr>
  <tr>
    <TD noWrap align=left>&nbsp; &nbsp; &nbsp;Accrued expenses
      and other payables </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right width="12%">19,681 </TD>
    <TD noWrap align=left width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right width="12%">22,411 </TD>
    <TD noWrap align=left width="2%">&nbsp;</TD>
  </tr>
  <tr>
    <TD noWrap
      align=left bgcolor="#E6EFFF">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Total current liabilities </TD>
    <TD noWrap align=left width="1%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD noWrap align=right width="12%" bgcolor="#E6EFFF">285,192 </TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD noWrap align=left width="1%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD noWrap align=right width="12%" bgcolor="#E6EFFF">265,510 </TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" >&nbsp;</TD>
  </tr>
  <tr>
    <TD noWrap align=left>&nbsp; &nbsp; &nbsp;Long-term bank
      loans, less current maturities </TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="12%">22,719 </TD>
    <TD noWrap align=left width="2%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="12%">29,890 </TD>
    <TD noWrap align=left width="2%">&nbsp;</TD>
  </tr>
  <tr>
    <TD noWrap align=left bgcolor="#E6EFFF">&nbsp; &nbsp; &nbsp;Deferred revenue </TD>
    <TD noWrap align=left width="1%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD noWrap align=right width="12%" bgcolor="#E6EFFF">7,392 </TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD noWrap align=left width="1%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD noWrap align=right width="12%" bgcolor="#E6EFFF">7,353 </TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" >&nbsp;</TD>
  </tr>
  <tr>
    <TD noWrap align=left>&nbsp; &nbsp; &nbsp;Other long-term
      payables </TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="12%">10,359 </TD>
    <TD noWrap align=left width="2%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="12%">3,431 </TD>
    <TD noWrap align=left width="2%">&nbsp;</TD>
  </tr>
  <tr>
    <TD noWrap align=left bgcolor="#E6EFFF">&nbsp; &nbsp; &nbsp;Deferred tax liabilities </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%" bgcolor="#E6EFFF"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="12%" bgcolor="#E6EFFF">723 </TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%" bgcolor="#E6EFFF"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="12%" bgcolor="#E6EFFF">719 </TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" >&nbsp;</TD>
  </tr>
  <tr>
    <TD noWrap align=left>Total liabilities </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right width="12%">326,385 </TD>
    <TD noWrap align=left width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right width="12%">306,903 </TD>
    <TD noWrap align=left width="2%">&nbsp;</TD>
  </tr>
  <tr>
    <TD noWrap align=left bgcolor="#E6EFFF">Commitments and contingencies </TD>
    <TD noWrap align=left width="1%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD noWrap align=left width="12%" bgcolor="#E6EFFF">&nbsp; </TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD noWrap align=left width="1%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD noWrap align=left width="12%" bgcolor="#E6EFFF">&nbsp; </TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" >&nbsp;</TD>
  </tr>
  <tr>
    <TD noWrap align=left><B>Shareholders&#146; equity:</B> </TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="12%">&nbsp; </TD>
    <TD noWrap align=left width="2%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="12%">&nbsp; </TD>
    <TD noWrap align=left width="2%">&nbsp;</TD>
  </tr>
  <tr>
    <TD noWrap align=left bgcolor="#E6EFFF">&nbsp; Ordinary shares US$ 0.001 par
      value; 100,000,000 </TD>
    <TD noWrap align=left width="1%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD noWrap align=left width="12%" bgcolor="#E6EFFF">&nbsp; </TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD noWrap align=left width="1%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD noWrap align=left width="12%" bgcolor="#E6EFFF">&nbsp; </TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" >&nbsp;</TD>
  </tr>
  <tr>
    <TD noWrap align=left bgColor=#E6EFFF>&nbsp; &nbsp; &nbsp;authorized;
      63,612,526 and 63,616,276 issued and </TD>
    <TD noWrap align=left width="1%"  bgColor=#E6EFFF>&nbsp;</TD>
    <TD noWrap align=left width="12%" bgColor=#E6EFFF>&nbsp; </TD>
    <TD noWrap align=left width="2%"  bgColor=#E6EFFF>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#E6EFFF>&nbsp;</TD>
    <TD noWrap align=left width="12%" bgColor=#E6EFFF>&nbsp; </TD>
    <TD noWrap align=left width="2%"
bgColor=#E6EFFF>&nbsp;</TD>
  </tr>
  <tr>
    <TD noWrap align=left bgcolor="#E6EFFF">&nbsp; &nbsp; &nbsp;outstanding as of September 30,
      2010 and December </TD>
    <TD noWrap align=left width="1%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD noWrap align=left width="12%" bgcolor="#E6EFFF">&nbsp; </TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD noWrap align=left width="1%" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD noWrap align=left width="12%" bgcolor="#E6EFFF">&nbsp; </TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" >&nbsp;</TD>
  </tr>
  <tr>
    <TD noWrap align=left bgColor=#E6EFFF>&nbsp; &nbsp; &nbsp;31, 2010
      respectively </TD>
    <TD noWrap align=left width="1%"  bgColor=#E6EFFF>&nbsp;</TD>
    <TD noWrap align=right width="12%" bgColor=#E6EFFF>64 </TD>
    <TD noWrap align=left width="2%"  bgColor=#E6EFFF>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#E6EFFF>&nbsp;</TD>
    <TD noWrap align=right width="12%" bgColor=#E6EFFF>64 </TD>
    <TD noWrap align=left width="2%"
bgColor=#E6EFFF>&nbsp;</TD>
  </tr>
  <tr>
    <TD noWrap align=left>&nbsp; &nbsp; &nbsp;Donation Shares </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="12%">14,102 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="12%">14,102 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
  </tr>
  <tr>
    <TD noWrap align=left bgColor=#E6EFFF>&nbsp; &nbsp; &nbsp;Additional
      paid-in-capital </TD>
    <TD noWrap align=left width="1%"  bgColor=#E6EFFF>&nbsp;</TD>
    <TD noWrap align=right width="12%" bgColor=#E6EFFF>125,077 </TD>
    <TD noWrap align=left width="2%"  bgColor=#E6EFFF>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#E6EFFF>&nbsp;</TD>
    <TD noWrap align=right width="12%" bgColor=#E6EFFF>124,551 </TD>
    <TD noWrap align=left width="2%"
bgColor=#E6EFFF>&nbsp;</TD>
  </tr>
  <tr>
    <TD noWrap align=left>&nbsp; &nbsp; &nbsp;Statutory reserves </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="12%">7,645 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="12%">7,315 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
  </tr>
  <tr>
    <TD noWrap align=left bgColor=#E6EFFF>&nbsp; &nbsp; &nbsp;Accumulated
      deficit </TD>
    <TD noWrap align=left width="1%"  bgColor=#E6EFFF>&nbsp;</TD>
    <TD noWrap align=right width="12%" bgColor=#E6EFFF>(23,531</TD>
    <TD noWrap align=left width="2%"  bgColor=#E6EFFF>) </TD>
    <TD noWrap align=left width="1%"  bgColor=#E6EFFF>&nbsp;</TD>
    <TD noWrap align=right width="12%" bgColor=#E6EFFF>(19,542</TD>
    <TD noWrap align=left width="2%"  bgColor=#E6EFFF>) </TD>
  </tr>
  <tr>
    <TD noWrap align=left>&nbsp; &nbsp; &nbsp;Accumulated other comprehensive
      income </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="12%">30,060 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="12%">28,010 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
  </tr>
  <tr>
    <TD noWrap align=left
      bgColor=#E6EFFF>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Less:
      Treasury shares </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
     bgColor=#E6EFFF>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right width="12%"
    bgColor=#E6EFFF>(4,067</TD>
    <TD noWrap align=left width="2%"  bgColor=#E6EFFF>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
     bgColor=#E6EFFF>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right width="12%"
    bgColor=#E6EFFF>(4,067</TD>
    <TD noWrap align=left width="2%"  bgColor=#E6EFFF>) </TD>
  </tr>
  <tr>
    <TD noWrap
      align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Total shareholders&#146; equity </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="12%">149,350 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="12%">150,433 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
  </tr>
  <tr>
    <TD noWrap align=left bgColor=#E6EFFF><B>Total liabilities and
      shareholders&#146; equity</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
     bgColor=#E6EFFF>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right width="12%"
    bgColor=#E6EFFF>&nbsp;475,735 </TD>
    <TD noWrap align=left width="2%"  bgColor=#E6EFFF>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
     bgColor=#E6EFFF>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right width="12%"
    bgColor=#E6EFFF>&nbsp;457,336 </TD>
    <TD noWrap align=left width="2%"
  bgColor=#E6EFFF>&nbsp;</TD>
  </tr>
</TABLE><BR>
<!--$$/page=--><A name=page_7></A><br>
<br>
<BR>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="50%"><font size="2">China BAK Battery Inc.</font></td>
    <td width="50%">
    <p align="right"><font size="2">Page 6 of 8</font></td>
  </tr>
</table>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<P align=center><B>Table 3</B><BR></P>
<P align=center><B>China BAK Battery, Inc. and Subsidiaries <BR>Condensed
Interim Consolidated Statements of Cash Flows <BR></B><B>For the Three Months
Ended December 31, 2010, September 30, 2010 and December 31, 2009 <BR>(Amounts
in thousands) </B></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 height="543">

  <TR vAlign=top>
    <TD noWrap align=left height="16">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%" height="16"
    ></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center
      width="10%" height="16">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="2%" height="16"
    ></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="1%" height="16"
    ></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center
      width="10%" height="16"><B>Three Months Ended</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="2%" height="16"
    ></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="1%" height="16"
    ></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center
      width="10%" height="16">&nbsp; </TD>
    <TD noWrap align=left width="2%" height="16" ></TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left height="16">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%" height="16"
    ></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center
      width="10%" height="16"><B>December 31, 2010</B> </TD>
    <TD noWrap align=center width="2%" height="16" ></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="1%" height="16"
    ></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center
      width="10%" height="16"><B>September 30, 2010</B> </TD>
    <TD noWrap align=center width="2%" height="16" ></TD>
    <TD noWrap align=center width="1%" style="border-bottom-style: solid; border-bottom-width: 1" height="16" ></TD>
    <TD noWrap align=center width="10%" style="border-bottom-style: solid; border-bottom-width: 1" height="16"><B>December 31, 2009</B> </TD>
    <TD noWrap align=left width="2%" height="16" ></TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left height="15">&nbsp; </TD>
    <TD noWrap align=left width="1%" height="15" ></TD>
    <TD noWrap align=center width="10%" height="15"><B>(Unaudited)</B> </TD>
    <TD noWrap align=center width="2%" height="15" ></TD>
    <TD noWrap align=center width="1%" height="15" ></TD>
    <TD noWrap align=center width="10%" height="15"><B>(Unaudited)</B> </TD>
    <TD noWrap align=center width="2%" height="15" ></TD>
    <TD noWrap align=center width="1%" style="border-top-style: solid; border-top-width: 1" height="16" ></TD>
    <TD noWrap align=center width="10%" style="border-top-style: solid; border-top-width: 1" height="16"><B>(Unaudited)</B> </TD>
    <TD noWrap align=left width="2%" height="15" ></TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left bgColor=#e6efff height="15">
    <p style="text-indent: -10pt; margin-left: 10pt">&nbsp;C<B>ash flow from
    operating activities</B> </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff height="15">&nbsp;</TD>
    <TD noWrap align=left width="10%" bgColor=#e6efff height="15">&nbsp; </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff height="15">&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff height="15">&nbsp;</TD>
    <TD noWrap align=left width="10%" bgColor=#e6efff height="15">&nbsp; </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff height="15">&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff height="15">&nbsp;</TD>
    <TD noWrap align=left width="10%" bgColor=#e6efff height="15">&nbsp; </TD>
    <TD noWrap align=left width="2%"
bgColor=#e6efff height="15">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left height="15">
    <p style="text-indent: -10pt; margin-left: 10pt">&nbsp;  Net loss
</TD>
    <TD noWrap align=left width="1%" height="15" >$</TD>
    <TD noWrap align=right width="10%" height="15">&nbsp;(3,658</TD>
    <TD noWrap align=left width="2%" height="15" >) </TD>
    <TD noWrap align=left width="1%" height="15" >$</TD>
    <TD noWrap align=right width="10%" height="15">&nbsp;(8,578</TD>
    <TD noWrap align=left width="2%" height="15" >) </TD>
    <TD noWrap align=left width="1%" height="15" >$</TD>
    <TD noWrap align=right width="10%" height="15">&nbsp;(3,392</TD>
    <TD noWrap align=left width="2%" height="15" >) </TD></TR>
  <TR vAlign=top>
    <TD align=left
      bgColor=#e6efff height="15">
    <p style="text-indent: -10pt; margin-left: 10pt">&nbsp;&nbsp;Adjustments to reconcile net loss to net cash provided by / (used in) operating activities: </TD>
    <TD align=left width="1%"  bgColor=#e6efff height="15"></TD>
    <TD align=left width="10%" bgColor=#e6efff height="15"></TD>
    <TD align=left width="2%"  bgColor=#e6efff height="15"></TD>
    <TD align=left width="1%"  bgColor=#e6efff height="15"></TD>
    <TD align=left width="10%" bgColor=#e6efff height="15"></TD>
    <TD align=left width="2%"  bgColor=#e6efff height="15"></TD>
    <TD align=left width="1%"  bgColor=#e6efff height="15"></TD>
    <TD align=left width="10%" bgColor=#e6efff height="15"></TD>
    <TD align=left width="2%"  bgColor=#e6efff height="15"></TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left height="15">
    <p style="text-indent: -10pt; margin-left: 10pt">&nbsp;  Depreciation and amortization </TD>
    <TD noWrap align=left width="1%" height="15" ></TD>
    <TD noWrap align=right width="10%" height="15">4,319 </TD>
    <TD noWrap align=left width="2%" height="15" ></TD>
    <TD noWrap align=left width="1%" height="15" ></TD>
    <TD noWrap align=right width="10%" height="15">5,143 </TD>
    <TD noWrap align=left width="2%" height="15" ></TD>
    <TD noWrap align=left width="1%" height="15" ></TD>
    <TD noWrap align=right width="10%" height="15">4,193 </TD>
    <TD noWrap align=left width="2%" height="15" ></TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left bgColor=#e6efff height="15">
    <p style="text-indent: -10pt; margin-left: 10pt">&nbsp;  Provision for doubtful debts </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff height="15">&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff height="15">3,061 </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff height="15">&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff height="15">&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff height="15">1,336 </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff height="15">&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff height="15">&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff height="15">4,736 </TD>
    <TD noWrap align=left width="2%"
  bgColor=#e6efff height="15">&nbsp;</TD></TR>
  <tr>
    <TD noWrap align=left height="15">
    <p style="text-indent: -10pt; margin-left: 10pt">&nbsp; &nbsp;Provision for obsolete
      inventories </TD>
    <TD noWrap align=left width="1%" height="15"></TD>
    <TD noWrap align=right width="10%" height="15">- </TD>
    <TD noWrap align=left width="2%" height="15"></TD>
    <TD noWrap align=left width="1%" height="15"></TD>
    <TD noWrap align=right width="10%" height="15">(717</TD>
    <TD noWrap align=left width="2%" height="15">) </TD>
    <TD noWrap align=left width="1%" height="15"></TD>
    <TD noWrap align=right width="10%" height="15">(280</TD>
    <TD noWrap align=left width="2%" height="15">) </TD>
  </tr>
  <tr>
    <TD noWrap align=left bgcolor="#E6EFFF" height="15">
    <p style="text-indent: -10pt; margin-left: 10pt">&nbsp; &nbsp;Impairment charge </TD>
    <TD noWrap align=left width="1%" bgcolor="#E6EFFF" height="15" >&nbsp;</TD>
    <TD noWrap align=right width="10%" bgcolor="#E6EFFF" height="15">- </TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" height="15" >&nbsp;</TD>
    <TD noWrap align=left width="1%" bgcolor="#E6EFFF" height="15" >&nbsp;</TD>
    <TD noWrap align=right width="10%" bgcolor="#E6EFFF" height="15">1,981 </TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" height="15" >&nbsp;</TD>
    <TD noWrap align=left width="1%" bgcolor="#E6EFFF" height="15" >&nbsp;</TD>
    <TD noWrap align=right width="10%" bgcolor="#E6EFFF" height="15">- </TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" height="15" >&nbsp;</TD>
  </tr>
  <tr>
    <TD noWrap align=left height="15">
    <p style="text-indent: -10pt; margin-left: 10pt">&nbsp; &nbsp;Share-based
      compensation </TD>
    <TD noWrap align=left width="1%" height="15"></TD>
    <TD noWrap align=right width="10%" height="15">525 </TD>
    <TD noWrap align=left width="2%" height="15"></TD>
    <TD noWrap align=left width="1%" height="15"></TD>
    <TD noWrap align=right width="10%" height="15">1,420 </TD>
    <TD noWrap align=left width="2%" height="15"></TD>
    <TD noWrap align=left width="1%" height="15"></TD>
    <TD noWrap align=right width="10%" height="15">1,145 </TD>
    <TD noWrap align=left width="2%" height="15"></TD>
  </tr>
  <tr>
    <TD noWrap align=left bgcolor="#E6EFFF" height="15">
    <p style="text-indent: -10pt; margin-left: 10pt">&nbsp; &nbsp;Deferred income taxes </TD>
    <TD noWrap align=left width="1%" bgcolor="#E6EFFF" height="15" >&nbsp;</TD>
    <TD noWrap align=right width="10%" bgcolor="#E6EFFF" height="15">(236</TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" height="15" >) </TD>
    <TD noWrap align=left width="1%" bgcolor="#E6EFFF" height="15" >&nbsp;</TD>
    <TD noWrap align=right width="10%" bgcolor="#E6EFFF" height="15">(742</TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" height="15" >) </TD>
    <TD noWrap align=left width="1%" bgcolor="#E6EFFF" height="15" >&nbsp;</TD>
    <TD noWrap align=right width="10%" bgcolor="#E6EFFF" height="15">(1,495</TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" height="15" >) </TD>
  </tr>
  <tr>
    <TD noWrap align=left height="15">
    <p style="text-indent: -10pt; margin-left: 10pt">&nbsp; &nbsp;Deferred revenue </TD>
    <TD noWrap align=left width="1%" height="15"></TD>
    <TD noWrap align=right width="10%" height="15">(60</TD>
    <TD noWrap align=left width="2%" height="15">) </TD>
    <TD noWrap align=left width="1%" height="15"></TD>
    <TD noWrap align=right width="10%" height="15">(59</TD>
    <TD noWrap align=left width="2%" height="15">) </TD>
    <TD noWrap align=left width="1%" height="15"></TD>
    <TD noWrap align=right width="10%" height="15">(59</TD>
    <TD noWrap align=left width="2%" height="15">) </TD>
  </tr>
  <tr>
    <TD noWrap align=left bgcolor="#E6EFFF" height="15">
    <p style="text-indent: -10pt; margin-left: 10pt">&nbsp; &nbsp;Exchange (gain) / loss </TD>
    <TD noWrap align=left width="1%" bgcolor="#E6EFFF" height="15" >&nbsp;</TD>
    <TD noWrap align=right width="10%" bgcolor="#E6EFFF" height="15">(66</TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" height="15" >) </TD>
    <TD noWrap align=left width="1%" bgcolor="#E6EFFF" height="15" >&nbsp;</TD>
    <TD noWrap align=right width="10%" bgcolor="#E6EFFF" height="15">614 </TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" height="15" >&nbsp;</TD>
    <TD noWrap align=left width="1%" bgcolor="#E6EFFF" height="15" >&nbsp;</TD>
    <TD noWrap align=right width="10%" bgcolor="#E6EFFF" height="15">(263</TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" height="15" >) </TD>
  </tr>
  <tr>
    <TD noWrap align=left height="15">
    <p style="text-indent: -10pt; margin-left: 10pt">Changes in operating assets and
      liabilities: </TD>
    <TD noWrap align=left width="1%" height="15"></TD>
    <TD noWrap align=left width="10%" height="15">&nbsp; </TD>
    <TD noWrap align=left width="2%" height="15"></TD>
    <TD noWrap align=left width="1%" height="15"></TD>
    <TD noWrap align=left width="10%" height="15">&nbsp; </TD>
    <TD noWrap align=left width="2%" height="15"></TD>
    <TD noWrap align=left width="1%" height="15"></TD>
    <TD noWrap align=left width="10%" height="15">&nbsp; </TD>
    <TD noWrap align=left width="2%" height="15"></TD>
  </tr>
  <tr>
    <TD noWrap align=left bgcolor="#E6EFFF" height="21">
    <p style="text-indent: -10pt; margin-left: 10pt">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Trade accounts
      receivable </TD>
    <TD noWrap align=left width="1%" bgcolor="#E6EFFF" height="21" >&nbsp;</TD>
    <TD noWrap align=right width="10%" bgcolor="#E6EFFF" height="21">(7,872</TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" height="21" >) </TD>
    <TD noWrap align=left width="1%" bgcolor="#E6EFFF" height="21" >&nbsp;</TD>
    <TD noWrap align=right width="10%" bgcolor="#E6EFFF" height="21">(6,688</TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" height="21" >) </TD>
    <TD noWrap align=left width="1%" bgcolor="#E6EFFF" height="21" >&nbsp;</TD>
    <TD noWrap align=right width="10%" bgcolor="#E6EFFF" height="21">4,475 </TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" height="21" >&nbsp;</TD>
  </tr>
  <tr>
    <TD noWrap align=left height="15">
    <p style="text-indent: -10pt; margin-left: 10pt">&nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp;Inventories </TD>
    <TD noWrap align=left width="1%" height="15"></TD>
    <TD noWrap align=right width="10%" height="15">(2,228</TD>
    <TD noWrap align=left width="2%" height="15">) </TD>
    <TD noWrap align=left width="1%" height="15"></TD>
    <TD noWrap align=right width="10%" height="15">2,321 </TD>
    <TD noWrap align=left width="2%" height="15"></TD>
    <TD noWrap align=left width="1%" height="15"></TD>
    <TD noWrap align=right width="10%" height="15">(13,573</TD>
    <TD noWrap align=left width="2%" height="15">) </TD>
  </tr>
  <tr>
    <TD noWrap align=left bgcolor="#E6EFFF" height="15">
    <p style="text-indent: -10pt; margin-left: 10pt">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Prepayments and
      other receivables </TD>
    <TD noWrap align=left width="1%" bgcolor="#E6EFFF" height="15" >&nbsp;</TD>
    <TD noWrap align=right width="10%" bgcolor="#E6EFFF" height="15">522 </TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" height="15" >&nbsp;</TD>
    <TD noWrap align=left width="1%" bgcolor="#E6EFFF" height="15" >&nbsp;</TD>
    <TD noWrap align=right width="10%" bgcolor="#E6EFFF" height="15">98 </TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" height="15" >&nbsp;</TD>
    <TD noWrap align=left width="1%" bgcolor="#E6EFFF" height="15" >&nbsp;</TD>
    <TD noWrap align=right width="10%" bgcolor="#E6EFFF" height="15">(8,197</TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" height="15" >) </TD>
  </tr>
  <tr>
    <TD noWrap align=left height="15">
    <p style="text-indent: -10pt; margin-left: 10pt">&nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp;Accounts and bills payable </TD>
    <TD noWrap align=left width="1%" height="15"></TD>
    <TD noWrap align=right width="10%" height="15">15,962 </TD>
    <TD noWrap align=left width="2%" height="15"></TD>
    <TD noWrap align=left width="1%" height="15"></TD>
    <TD noWrap align=right width="10%" height="15">10,173 </TD>
    <TD noWrap align=left width="2%" height="15"></TD>
    <TD noWrap align=left width="1%" height="15"></TD>
    <TD noWrap align=right width="10%" height="15">(4,795</TD>
    <TD noWrap align=left width="2%" height="15">) </TD>
  </tr>
  <tr>
    <TD noWrap align=left bgcolor="#E6EFFF" height="16">
    <p style="text-indent: -10pt; margin-left: 10pt">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Accrued expenses
      and other payables </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%" bgcolor="#E6EFFF" height="16"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="10%" bgcolor="#E6EFFF" height="16">8,117 </TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" height="16" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%" bgcolor="#E6EFFF" height="16"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="10%" bgcolor="#E6EFFF" height="16">(1,825</TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" height="16" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%" bgcolor="#E6EFFF" height="16"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="10%" bgcolor="#E6EFFF" height="16">131 </TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" height="16" >&nbsp;</TD>
  </tr>
  <tr>
    <TD align=left height="16">
    <p style="text-indent: -10pt; margin-left: 10pt">Net cash provided by / (used in) operating
      activities </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff height="16">$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff height="16">&nbsp;18,386 </TD>
    <TD align=left width="2%"  bgColor=#e6efff height="16">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff height="16">$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff height="16">&nbsp;4,477 </TD>
    <TD align=left width="2%"  bgColor=#e6efff height="16">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff height="16">$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff height="16">&nbsp;(17,373</TD>
    <TD align=left width="2%"  bgColor=#e6efff height="16">) </TD>
  </tr>
  <tr>
    <TD noWrap align=left bgcolor="#E6EFFF" height="15">
    <p style="text-indent: -10pt; margin-left: 10pt"><B>Cash flow from investing activities</B> </TD>
    <TD noWrap align=left width="1%" bgcolor="#E6EFFF" height="15" >&nbsp;</TD>
    <TD noWrap align=left width="10%" bgcolor="#E6EFFF" height="15">&nbsp; </TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" height="15" >&nbsp;</TD>
    <TD noWrap align=left width="1%" bgcolor="#E6EFFF" height="15" >&nbsp;</TD>
    <TD noWrap align=left width="10%" bgcolor="#E6EFFF" height="15">&nbsp; </TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" height="15" >&nbsp;</TD>
    <TD noWrap align=left width="1%" bgcolor="#E6EFFF" height="15" >&nbsp;</TD>
    <TD noWrap align=left width="10%" bgcolor="#E6EFFF" height="15">&nbsp; </TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" height="15" >&nbsp;</TD>
  </tr>
  <tr>
    <TD align=left height="15">
    <p style="text-indent: -10pt; margin-left: 10pt">Purchases of property, plant and equipment
    </TD>
    <TD align=left width="1%" height="15"></TD>
    <TD align=right width="10%" height="15">(5,968</TD>
    <TD align=left width="2%" height="15">) </TD>
    <TD align=left width="1%" height="15"></TD>
    <TD align=right width="10%" height="15">(3,000</TD>
    <TD align=left width="2%" height="15">) </TD>
    <TD align=left width="1%" height="15"></TD>
    <TD align=right width="10%" height="15">(3,905</TD>
    <TD align=left width="2%" height="15">) </TD>
  </tr>
  <tr>
    <TD noWrap align=left bgcolor="#E6EFFF" height="16">
    <p style="text-indent: -10pt; margin-left: 10pt">&nbsp; &nbsp;Purchases of intangible assets </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%" bgcolor="#E6EFFF" height="16"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="10%" bgcolor="#E6EFFF" height="16">- </TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" height="16" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%" bgcolor="#E6EFFF" height="16"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="10%" bgcolor="#E6EFFF" height="16">- </TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" height="16" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%" bgcolor="#E6EFFF" height="16"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="10%" bgcolor="#E6EFFF" height="16">(1</TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" height="16" >) </TD>
  </tr>
  <tr>
    <TD noWrap align=left height="16">Net cash used in investing
      activities </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%" height="16">$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right width="10%" height="16">&nbsp;(5,968</TD>
    <TD noWrap align=left width="2%" height="16">) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%" height="16">$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right width="10%" height="16">&nbsp;(3,000</TD>
    <TD noWrap align=left width="2%" height="16">) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%" height="16">$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right width="10%" height="16">&nbsp;(3,906</TD>
    <TD noWrap align=left width="2%" height="16">) </TD>
  </tr>
  <tr>
    <TD noWrap align=left bgcolor="#E6EFFF" height="15"><B>Cash flow from financing activities</B> </TD>
    <TD noWrap align=left width="1%" bgcolor="#E6EFFF" height="15" >&nbsp;</TD>
    <TD noWrap align=left width="10%" bgcolor="#E6EFFF" height="15">&nbsp; </TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" height="15" >&nbsp;</TD>
    <TD noWrap align=left width="1%" bgcolor="#E6EFFF" height="15" >&nbsp;</TD>
    <TD noWrap align=left width="10%" bgcolor="#E6EFFF" height="15">&nbsp; </TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" height="15" >&nbsp;</TD>
    <TD noWrap align=left width="1%" bgcolor="#E6EFFF" height="15" >&nbsp;</TD>
    <TD noWrap align=left width="10%" bgcolor="#E6EFFF" height="15">&nbsp; </TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" height="15" >&nbsp;</TD>
  </tr>
  <tr>
    <TD noWrap align=left height="15">&nbsp; &nbsp;Proceeds from
      borrowings </TD>
    <TD noWrap align=left width="1%" height="15"></TD>
    <TD noWrap align=right width="10%" height="15">27,754 </TD>
    <TD noWrap align=left width="2%" height="15"></TD>
    <TD noWrap align=left width="1%" height="15"></TD>
    <TD noWrap align=right width="10%" height="15">3,300 </TD>
    <TD noWrap align=left width="2%" height="15"></TD>
    <TD noWrap align=left width="1%" height="15"></TD>
    <TD noWrap align=right width="10%" height="15">40,938 </TD>
    <TD noWrap align=left width="2%" height="15"></TD>
  </tr>
  <tr>
    <TD noWrap align=left bgcolor="#E6EFFF" height="15">&nbsp; &nbsp;Repayment of borrowings </TD>
    <TD noWrap align=left width="1%" bgcolor="#E6EFFF" height="15" >&nbsp;</TD>
    <TD noWrap align=right width="10%" bgcolor="#E6EFFF" height="15">(31,760</TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" height="15" >) </TD>
    <TD noWrap align=left width="1%" bgcolor="#E6EFFF" height="15" >&nbsp;</TD>
    <TD noWrap align=right width="10%" bgcolor="#E6EFFF" height="15">(6,660</TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" height="15" >) </TD>
    <TD noWrap align=left width="1%" bgcolor="#E6EFFF" height="15" >&nbsp;</TD>
    <TD noWrap align=right width="10%" bgcolor="#E6EFFF" height="15">(63,714</TD>
    <TD noWrap align=left width="2%" bgcolor="#E6EFFF" height="15" >) </TD>
  </tr>
  <tr>
    <TD noWrap align=left height="15">&nbsp; &nbsp;(Increase) / decrease
      in pledged deposits </TD>
    <TD noWrap align=left width="1%" height="15"></TD>
    <TD noWrap align=right width="10%" height="15">(6,758</TD>
    <TD noWrap align=left width="2%" height="15">) </TD>
    <TD noWrap align=left width="1%" height="15"></TD>
    <TD noWrap align=right width="10%" height="15">(6</TD>
    <TD noWrap align=left width="2%" height="15">) </TD>
    <TD noWrap align=left width="1%" height="15"></TD>
    <TD noWrap align=right width="10%" height="15">12,071 </TD>
    <TD noWrap align=left width="2%" height="15"></TD>
  </tr>
  <tr>
    <TD align=left bgcolor="#E6EFFF" height="15">Proceeds from issuance of capital stock, net </TD>
    <TD align=left width="1%" bgcolor="#E6EFFF" height="15" >&nbsp;</TD>
    <TD align=left width="10%" bgcolor="#E6EFFF" height="15"></TD>
    <TD align=left width="2%" bgcolor="#E6EFFF" height="15" >&nbsp;</TD>
    <TD align=left width="1%" bgcolor="#E6EFFF" height="15" >&nbsp;</TD>
    <TD align=right width="10%" bgcolor="#E6EFFF" height="15">- </TD>
    <TD align=left width="2%" bgcolor="#E6EFFF" height="15" >&nbsp;</TD>
    <TD align=left width="1%" bgcolor="#E6EFFF" height="15" >&nbsp;</TD>
    <TD align=right width="10%" bgcolor="#E6EFFF" height="15">19,616 </TD>
    <TD align=left width="2%" bgcolor="#E6EFFF" height="15" >&nbsp;</TD>
  </tr>
  <tr>
    <TD align=left height="16">Net cash (used in) / provided by financing
      activities </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%" height="16">$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%" height="16">&nbsp;(10,763</TD>
    <TD align=left width="2%" height="16">) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%" height="16">$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%" height="16">&nbsp;(3,366</TD>
    <TD align=left width="2%" height="16">) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%" height="16">$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%" height="16">&nbsp;8,911 </TD>
    <TD align=left width="2%" height="16"></TD>
  </tr>
  <tr>
    <TD align=left bgcolor="#E6EFFF" height="16"><B>Effect of exchange rate changes on</B> <B>cash and cash
      equivalents</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%" bgcolor="#E6EFFF" height="16"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%" bgcolor="#E6EFFF" height="16">283
    </TD>
    <TD align=left width="2%" bgcolor="#E6EFFF" height="16" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%" bgcolor="#E6EFFF" height="16"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    width="10%" bgcolor="#E6EFFF" height="16">(397</TD>
    <TD align=left width="2%" bgcolor="#E6EFFF" height="16" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%" bgcolor="#E6EFFF" height="16"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%" bgcolor="#E6EFFF" height="16">(7</TD>
    <TD align=left width="2%" bgcolor="#E6EFFF" height="16" >) </TD>
  </tr>
  <tr>
    <TD align=left height="15"><B>Net increase / (decrease) in cash
      and</B> <B>cash equivalents</B> </TD>
    <TD align=left width="1%" height="15"></TD>
    <TD align=right width="10%" height="15">1,938 </TD>
    <TD align=left width="2%" height="15"></TD>
    <TD align=left width="1%" height="15"></TD>
    <TD align=right width="10%" height="15">(2,286</TD>
    <TD align=left width="2%" height="15">) </TD>
    <TD align=left width="1%" height="15"></TD>
    <TD align=right width="10%" height="15">(12,375</TD>
    <TD align=left width="2%" height="15">) </TD>
  </tr>
  <tr>
    <TD align=left bgcolor="#E6EFFF" height="16"><B>Cash and cash equivalents at the</B> <B>beginning of the
      period</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%" bgcolor="#E6EFFF" height="16"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="10%" bgcolor="#E6EFFF" height="16">22,589 </TD>
    <TD align=left width="2%" bgcolor="#E6EFFF" height="16" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%" bgcolor="#E6EFFF" height="16"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="10%" bgcolor="#E6EFFF" height="16">24,875 </TD>
    <TD align=left width="2%" bgcolor="#E6EFFF" height="16" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%" bgcolor="#E6EFFF" height="16"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="10%" bgcolor="#E6EFFF" height="16">30,678 </TD>
    <TD align=left width="2%" bgcolor="#E6EFFF" height="16" >&nbsp;</TD>
  </tr>
  <tr>
    <TD align=left height="18"><B>Cash and cash equivalents at the end
      of</B> <B>the period</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%" height="18">$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="10%" height="18">&nbsp;24,527 </TD>
    <TD align=left width="2%" height="18"></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%" height="18">$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="10%" height="18">&nbsp;22,589 </TD>
    <TD align=left width="2%" height="18"></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%" height="18">$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="10%" height="18">&nbsp;18,303 </TD>
    <TD align=left width="2%" height="18"></TD>
  </tr>
</TABLE><BR>
<!--$$/page=--><A name=page_8></A>
<br>
<br>
&nbsp;<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="50%"><font size="2">China BAK Battery Inc.</font></td>
    <td width="50%">
    <p align="right"><font size="2">Page 7 of 8</font></td>
  </tr>
</table>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<P align=center><B>Table 4<br>
<br>
China BAK Battery, Inc. and
      subsidiaries</B>&nbsp; <B><br>
Reconciliation of non-GAAP to GAAP measures</B>&nbsp; <BR>
</P>
<!--$$/page=--><A name=page_9></A><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD noWrap align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center
      width="10%"><B>For the quarter ended</B> </TD>
    <TD noWrap align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center
      width="10%"><B>For the quarter ended</B> </TD>
    <TD noWrap align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center
      width="10%"><B>For the
      quarter ended</B></TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD></TR>

  <TR vAlign=top>
    <TD noWrap align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center
      width="10%"><B>December 31, 2010</B> </TD>
    <TD noWrap align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center
      width="10%"><B>September 30, 2010</B> </TD>
    <TD noWrap align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center
      width="10%"><B>December 31, 2009</B> </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left bgColor=#e6efff>
    <p style="text-indent: -10pt; margin-left: 10pt"><B>Gross Profit as reported under
      GAAP</B> </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff>9,996,364 </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff>5,307,908 </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff>9,559,880 </TD>
    <TD noWrap align=left width="2%"
bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left>
    <p style="text-indent: -10pt; margin-left: 10pt">Add: Provision / (recovery) for obsolete inventories
    </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=left width="10%">&nbsp; </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" style="border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD noWrap align=right width="10%" style="border-bottom-style: solid; border-bottom-width: 1">-716,973 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" style="border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD noWrap align=right width="10%" style="border-bottom-style: solid; border-bottom-width: 1">-280,255 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left bgColor=#e6efff>
    <p style="text-indent: -10pt; margin-left: 10pt"><B>Non-GAAP Gross Profit</B> </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff><B>9,996,364</B> </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff style="border-top-style: solid; border-top-width: 1"><B>4,590,935</B> </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff style="border-top-style: solid; border-top-width: 1"><B>9,279,625</B> </TD>
    <TD noWrap align=left width="2%"
bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left>
    <p style="text-indent: -10pt; margin-left: 10pt"><B>Operating Income (Loss) as reported under
      GAAP</B> </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="10%">-1,800,414 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="10%">-7,336,480 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="10%">-2,873,537 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left bgColor=#e6efff>
    <p style="text-indent: -10pt; margin-left: 10pt">Add: Provision for doubtful debts
</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff>3,060,868 </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff>1,336,468 </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff>4,736,336 </TD>
    <TD noWrap align=left width="2%"
bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left>
    <p style="text-indent: -10pt; margin-left: 10pt">Add: Provision / (recovery) for obsolete inventories
    </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="10%">- </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="10%">-716,973 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="10%">-280,255 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left bgColor=#e6efff>
    <p style="text-indent: -10pt; margin-left: 10pt">Add: Share-based compensation costs
    </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff>525,019 </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff>1,420,061 </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff>1,145,210 </TD>
    <TD noWrap align=left width="2%"
bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left>
    <p style="text-indent: -10pt; margin-left: 10pt">Add: Impairment charge </TD>
    <TD noWrap align=left width="1%" style="border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD noWrap align=right width="10%" style="border-bottom-style: solid; border-bottom-width: 1">- </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" style="border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD noWrap align=right width="10%" style="border-bottom-style: solid; border-bottom-width: 1">1,980,741 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" style="border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD noWrap align=right width="10%" style="border-bottom-style: solid; border-bottom-width: 1">- </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left bgColor=#e6efff>
    <p style="text-indent: -10pt; margin-left: 10pt"><B>Non-GAAP Operating Income
      (Loss)</B> </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff style="border-top-style: solid; border-top-width: 1"><B>1,785,473</B> </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff style="border-top-style: solid; border-top-width: 1"><B>-3,316,183</B> </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff style="border-top-style: solid; border-top-width: 1"><B>2,727,754</B> </TD>
    <TD noWrap align=left width="2%"
bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left>
    <p style="text-indent: -10pt; margin-left: 10pt"><B>Net Income (Loss) as reported under GAAP</B> </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="10%">-3,657,792 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="10%">-8,577,780 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="10%">-3,392,327 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left bgColor=#e6efff>
    <p style="text-indent: -10pt; margin-left: 10pt">Add: Provision for doubtful debts
</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff>3,060,868 </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff>1,336,468 </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff>4,736,336 </TD>
    <TD noWrap align=left width="2%"
bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left>
    <p style="text-indent: -10pt; margin-left: 10pt">Add: Provision for obsolete inventories </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="10%">- </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="10%">-716,973 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="10%">-280,255 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left bgColor=#e6efff>
    <p style="text-indent: -10pt; margin-left: 10pt">Add: Share-based compensation costs
    </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff>525,019 </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff>1,420,061 </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff>1,145,210 </TD>
    <TD noWrap align=left width="2%"
bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left>
    <p style="text-indent: -10pt; margin-left: 10pt">Add: Impairment charge </TD>
    <TD noWrap align=left width="1%" style="border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD noWrap align=right width="10%" style="border-bottom-style: solid; border-bottom-width: 1">- </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" style="border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD noWrap align=right width="10%" style="border-bottom-style: solid; border-bottom-width: 1">1,980,741 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" style="border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD noWrap align=right width="10%" style="border-bottom-style: solid; border-bottom-width: 1">- </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left bgColor=#e6efff>
    <p style="text-indent: -10pt; margin-left: 10pt"><B>Non-GAAP Net Income (Loss)</B>
</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff style="border-top-style: solid; border-top-width: 1"><B>-71,905</B> </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff style="border-top-style: solid; border-top-width: 1"><B>-4,557,483</B> </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff style="border-top-style: solid; border-top-width: 1"><B>2,208,964</B> </TD>
    <TD noWrap align=left width="2%"
bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left>
    <p style="text-indent: -10pt; margin-left: 10pt"><B>Diluted Earnings (Loss) Per Share reported under
      GAAP</B> </TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="10%">-$0.06 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="10%">-$0.14 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="10%">-$0.06 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left bgColor=#e6efff>
    <p style="text-indent: -10pt; margin-left: 10pt">Add: Provision for doubtful debts
</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff>0.05 </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff>0.02 </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff>0.08 </TD>
    <TD noWrap align=left width="2%"
bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left>
    <p style="text-indent: -10pt; margin-left: 10pt">Add: Provision for obsolete inventories </TD>
    <TD noWrap align=left width="1%" >$</TD>
    <TD noWrap align=right width="10%">0.00 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >&nbsp;</TD>
    <TD noWrap align=right width="10%">-$0.01 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >$</TD>
    <TD noWrap align=right width="10%">0.00 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left bgColor=#e6efff>
    <p style="text-indent: -10pt; margin-left: 10pt">Add: Share-based compensation costs
    </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff>0.01 </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff>0.02 </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff>0.02 </TD>
    <TD noWrap align=left width="2%"
bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left>
    <p style="text-indent: -10pt; margin-left: 10pt">Add: Impairment charge </TD>
    <TD noWrap align=left width="1%" >$</TD>
    <TD noWrap align=right width="10%">0.00 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >$</TD>
    <TD noWrap align=right width="10%">0.03 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD>
    <TD noWrap align=left width="1%" >$</TD>
    <TD noWrap align=right width="10%">0.00 </TD>
    <TD noWrap align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left bgColor=#e6efff>
    <p style="text-indent: -10pt; margin-left: 10pt"><B>Non-GAAP Diluted (Loss) Earnings
      Per Share</B> </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff><B>$</B></TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff><B>0.00</B> </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff><B>-$0.08</B> </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff><B>$</B></TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff><B>0.04</B> </TD>
    <TD noWrap align=left width="2%"
bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>
    <p style="text-indent: -10pt; margin-left: 10pt"><B>Diluted weighted average number of common stock</B>
      <B>outstanding</B> </TD>
    <TD align=left width="1%" ></TD>
    <TD align=left width="10%"></TD>
    <TD align=left width="2%" ></TD>
    <TD align=left width="1%" ></TD>
    <TD align=left width="10%"></TD>
    <TD align=left width="2%" ></TD>
    <TD align=left width="1%" ></TD>
    <TD align=left width="10%"></TD>
    <TD align=left width="2%" ></TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left bgColor=#e6efff>
    <p style="text-indent: -10pt; margin-left: 10pt">&nbsp; </TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff><B>62,895,001</B> </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff><B>62,890,069</B> </TD>
    <TD noWrap align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#e6efff><B>61,107,713</B> </TD>
    <TD noWrap align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD></TR></TABLE>
<P align=justify><br>
&nbsp;</P>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="50%"><font size="2">China BAK Battery Inc.</font></td>
    <td width="50%">
    <p align="right"><font size="2">Page 8 of 8</font></td>
  </tr>
</table>
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<SEQUENCE>3
<FILENAME>exhibit99-1x1x1.jpg
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`
end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
